IDEXX Laboratories Announces Second Quarter Results

2008-07-25 06:00:00

IDEXX Laboratories Announces Second Quarter Results

    WESTBROOK, Maine, July 25 /EMWPresswire/ -- IDEXX Laboratories,

Inc. (Nasdaq: IDXX), today reported that revenue for the second quarter of

2008 increased 18% to $280.6 million from $237.0 million for the second

quarter of 2007. Diluted earnings per share ("EPS") for the quarter ended

June 30, 2008 were $0.63, compared to $0.34 for the same period in the

prior year. Second quarter 2007 results included several discrete items

detailed in the accompanying non-GAAP reconciliation table that reduced

reported EPS by $0.10. There were no adjustments to EPS related to discrete

items in the second quarter of 2008. Diluted EPS grew 43% when compared to

second quarter 2007 non-GAAP diluted EPS of $0.44.



    "Our results for both the second quarter and the first half of the year

demonstrate the consistency of our revenue and profit model. The economic

environment contributed to slightly slower organic revenue growth compared

to recent quarters after taking into account exceptional revenues from one

of our pharmaceutical products; however, we had strong earnings growth and

above plan operating margins," said Jonathan W. Ayers, Chairman and Chief

Executive Officer. "We continue to see solid revenue trends overall,

particularly in the companion animal veterinary market, and we have raised

our earnings per share guidance for the full year of 2008, even as we

remain somewhat cautious about the economic outlook."



    "We also continue to achieve milestones in the controlled launch of our

next generation point-of-care instrument systems, Catalyst Dx(TM) and

SNAPshot Dx(TM). We are gaining customer experience with the early

placements and, as part of the controlled launch process, are incorporating

refinements in the instruments' design and software, all while building a

backlog of orders for higher volume shipments in the second half of the

year."



    Revenue Performance



    Companion Animal Group ("CAG") revenue for the second quarter of 2008

increased 19% to $230.8 million from $194.0 million for the second quarter

of 2007. Acquisitions of reference laboratories contributed less than 1% to

CAG revenue growth and changes in foreign currency exchange rates

contributed an additional 4%. Growth for the quarter adjusted for

acquisitions and foreign currency exchange rates was 15%. The increase in

CAG revenue was due to increased sales volume across all lines of business,

most notably in our pharmaceuticals business where incremental sales of PZI

VET(R), our insulin product for the treatment of diabetic cats, contributed

an estimated $10 million, or 5%, to CAG revenue growth. In the second

quarter we announced that we would be discontinuing this product because

the raw material is no longer available, which resulted in the subsequent

sale of all of our remaining PZI VET(R) inventory.



    Water segment revenue for the second quarter of 2008 increased 18% to

$20.2 million from $17.1 million for the second quarter of 2007 as higher

sales volume offset lower average unit sales prices driven by changes in

regional sales mix. Higher sales volumes reflected the distribution of

water testing kits manufactured by Invitrogen Corporation under an

arrangement that commenced in September 2007, which contributed 8% to Water

revenue growth. Changes in foreign currency exchange rates also added 4% to

Water revenue growth.



    Production Animal Segment ("PAS") revenue for the second quarter of

2008 increased 15% to $21.5 million from $18.7 million for the second

quarter of 2007 as higher livestock diagnostics sales volume offset lower

average unit sales prices resulting from increased price competition.

Changes in foreign currency exchange rates contributed 11% to PAS revenue

growth.



    Year-to-Date Results



    Year-to-date revenue increased 18% to $529.6 million from $448.2

million for the six months ended June 30, 2007. Revenue for the six months

ended June 30, 2008, adjusted for the impacts of acquisitions and foreign

currency exchange rates, increased 12%.



    Year-to-date diluted EPS increased 61% to $1.06 from $0.66 for the six

months ended June 30, 2007. Non-GAAP diluted EPS of $1.04 grew 33% when

compared to 2007 non-GAAP diluted EPS of $0.78.



    Additional Operating Results for the Second Quarter



    Gross profit for the second quarter of 2008 increased $37.0 million, or

32%, to $151.3 million from $114.2 million for the second quarter of 2007.

Gross margin increased to 54% from 48%. Gross margin in the second quarter

of 2007 was depressed by the write-off of inventory and prepaid royalties

related to our Navigator pharmaceutical product.



    Research and development ("R&D") expense for the second quarter of 2008

was $18.3 million compared to $17.3 million for the second quarter of 2007.

As a percentage of revenue, R&D expense was 7% in both the second quarter

of 2007 and 2008. R&D expense growth reflected higher personnel costs due,

in part, to increased headcount and increased corporate research and

development resources dedicated to software for information management.

These increases were partly offset by a decrease in product development

spending related to our Catalyst Dx(TM) and SNAPshot Dx(TM) analyzers,

which were launched in the first quarter.



    Selling, general and administrative ("SG&A") expense for the second

quarter of 2008 was $74.1 million, or 26% of revenue, compared to $64.4

million, or 27% of revenue, for the second quarter of 2007. Growth in SG&A

expense reflected increased headcount and worldwide expansion of sales,

marketing and customer support resources as well as the unfavorable impact

of exchange rates on foreign currency denominated expenses.



    Supplementary Analysis of Results



    The accompanying financial tables provide more information concerning

our revenue and other operating results for the three and six months ended

June 30, 2008, as well as a reconciliation of non-GAAP diluted EPS to

earnings per share.



    Outlook



    The Company offers the following revised guidance for the full year of

2008:



    -- Revenue is expected to be $1.06 billion to $1.07 billion, updated

from guidance of $1.06 billion to $1.075 billion provided in April of this

year, which represents revenue growth of 15% to 16%.



    -- Diluted EPS are expected to be $1.89 to $1.92, updated from guidance

of $1.84 to $1.87 provided in April of this year, which represents EPS

growth of 29% to 32%.



    -- Non-GAAP diluted EPS are expected to be $1.87 to $1.90, reflecting

growth of 18% to 20%. Non-GAAP diluted EPS excludes the impact of discrete

income tax benefits in 2008 and acquisition-related purchase accounting and

acquisition integration costs and the write-down of certain pharmaceutical

assets in 2007.



    Conference Call and Webcast Information



    IDEXX Laboratories will be hosting a conference call today at 9:00 a.m.

(eastern) to discuss its second quarter results. To participate in the

conference call, dial 612-332-0530 or 800-288-8968 and reference

confirmation code 954295. An audio replay will be available through August

1, 2008 by dialing 320-365-3844 and referencing replay code 954295.



    The call will also be available via live or archived Webcast on the

IDEXX Laboratories' web site at http://www.idexx.com.



    About IDEXX Laboratories



    IDEXX Laboratories, Inc. is a leader in companion animal health,

serving practicing veterinarians around the world with innovative,

technology-based offerings, including a broad range of diagnostic products

and services, practice management systems and pharmaceuticals. IDEXX

products enhance the ability of veterinarians to provide advanced medical

care and to build more economically successful practices. IDEXX is also a

worldwide leader in providing diagnostic tests and information for the

production animal industry and tests for the quality and safety of water

and milk. Headquartered in Maine, IDEXX Laboratories employs more than

4,500 people and offers products to customers in over 100 countries.



    Note Regarding Forward-Looking Statements



    This press release contains statements about the Company's business

prospects and estimates of the Company's financial results for future

periods that are forward-looking statements as defined in the Private

Securities Litigation Reform Act of 1995. These statements are based on

management's expectations of future events as of the date of this press

release, and the Company assumes no obligation to update any

forward-looking statements as a result of new information or future events

or developments. Actual results could differ materially from management's

expectations. Factors that could cause or contribute to such differences

include the following: the Company's ability to develop, manufacture,

introduce and market new products and enhancements to existing products;

the effectiveness of the Company's sales and marketing activities;

disruptions, shortages or pricing changes that affect the Company's

purchases of products and materials from third parties, including from sole

source suppliers; the Company's ability to identify acquisition

opportunities, complete acquisitions and integrate acquired businesses; the

impact of competition, technological change, and veterinary hospital

consolidation on the markets for the Company's products; the Company's

ability to manufacture complex biologic products; the effect of government

regulation on the Company's business, including government decisions about

whether and when to approve the Company's products and decisions regarding

labeling, manufacturing and marketing products; the impact of distributor

purchasing decisions on sales of the Company's products that are sold

through distribution; changes or trends in veterinary medicine that affect

the rate of use of the Company's products and services by veterinarians;

the effects of deep or sustained economic weakness on pet owner decisions

regarding pet health care; the Company's ability to obtain patent and other

intellectual property protection for its products, successfully enforce its

intellectual property rights and defend itself against third party claims

against the Company; the effects of operations outside the U.S., including

from currency fluctuations, different regulatory, political and economic

conditions, and different market conditions; and the loss of key employees.

A further description of these and other factors can be found in the

Company's Annual Report on Form 10-K for the year ended December 31, 2007,

and quarterly report on Form 10-Q for the quarter ended March 31, 2008, in

the section captioned "Risk Factors."




Contact: Merilee Raines, Chief Financial Officer, 1-207-556-8155 IDEXX Laboratories, Inc. and Subsidiaries Consolidated Statement of Operations Amounts in thousands except per share data (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Revenue: Revenue $280,570 $237,046 $529,644 $448,201 Expenses and Cost of Income: revenue 129,310 122,825 248,548 225,401 Gross profit 151,260 114,221 281,096 222,800 Sales and marketing 44,214 36,747 88,215 72,329 General and administrative 29,881 27,690 59,702 53,839 Research and development 18,274 17,317 35,569 33,288 Income from operations 58,891 32,467 97,610 63,344 Interest expense, net 643 834 1,128 806 Income before provision for income taxes 58,248 31,633 96,482 62,538 Provision for income taxes 18,884 9,969 29,567 19,847 Net Income: Net income $39,364 $21,664 $66,915 $42,691 Earnings per share: Basic $0.66 $0.35 $1.11 $0.69 Earnings per share: Diluted $0.63 $0.34 $1.06 $0.66 Shares outstanding: Basic 60,029 61,697 60,448 61,984 Shares outstanding: Diluted 62,440 64,400 63,017 64,758 Historical share and per share data has been retroactively restated to reflect the additional shares of common stock that were distributed on November 26, 2007 as a result of the two-for-one split of our outstanding common stock. IDEXX Laboratories, Inc. and Subsidiaries Key Operating Information (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Key Operating Gross profit 53.9% 48.2% 53.1% 49.7% Ratios (as a Sales, percentage of marketing, revenue): general and administrative expense 26.4% 27.2% 27.9% 28.2% Research and development expense 6.5% 7.3% 6.7% 7.4% Income from operations (1) 21.0% 13.7% 18.4% 14.1% International International Revenue: revenue (in thousands) $113,928 $94,098 $217,256 $174,967 International revenue as a percentage of total revenue 40.6% 39.7% 41.0% 39.0% (1) The sum of individual items may not equal the total due to rounding. IDEXX Laboratories, Inc. and Subsidiaries Non-GAAP Financial Measures Amounts in thousands except per share data (Unaudited) Three Months Ended Income from Gross Profit Operations June 30, June 30, June 30, June 30, 2008 2007 2008 2007 GAAP measurement $151,260 $114,221 $58,891 $32,467 % of revenue 53.9% 48.2% 21.0% 13.7% Write-downs of certain pharmaceutical assets (1) - 10,138 - 10,138 Acquisition-related purchase accounting and acquisition integration costs (2) - 644 - 808 Non-GAAP comparative measurements (3) $151,260 $125,003 $58,891 $43,413 % of revenue 53.9% 52.7% 21.0% 18.3% Three Months Ended Earnings per Share Net Income Diluted June 30, June 30, June 30, June 30, 2008 2007 2008 2007 GAAP measurement $39,364 $21,664 $0.63 $0.34 % of revenue 14.0% 9.1% Write-downs of certain pharmaceutical assets (1) - 6,392 - 0.10 Acquisition-related purchase accounting and acquisition integration costs (2) - 528 - 0.01 Non-GAAP comparative measurements (3) $39,364 $28,584 $0.63 $0.44 % of revenue 14.0% 12.1% Management believes adjusted diluted EPS is a useful non-GAAP financial measure to evaluate the results of ongoing operations, excluding significant specified events, period over period, and therefore believes that investors may find this information useful in addition to the GAAP results. We use these supplemental non-GAAP financial measures to evaluate the Company's comparative financial performance. The specified items that are excluded in these non-GAAP measures are actual charges that impact net income and cash flows, however, we believe that it is useful to evaluate our core business performance period over period excluding these specified items, in addition to relying upon GAAP financial measures. (1) We believe that the write-down of certain pharmaceutical assets is not indicative of future performance because significant costs of a similar nature are not likely to recur within a reasonable period. We believe that we do not have other large inventory investments where the relationship of inventory to current sales volume creates significant exposure to valuation risk. During the second quarter of 2007, we recognized a $9.1 million write-down of raw materials inventory and a $1.0 million write-off of a prepaid royalty license associated with Navigator(R) paste, a nitazoxanide product for the treatment of equine protozoal myeloencephalitis. We have written down these assets because the third-party contract manufacturer of finished goods recently gave notification that it will discontinue manufacturing the product in 2009. Additionally, product sales have been significantly lower than projected. Due in part to an estimated production volume which is low, we believe that we will not be able to enter into a replacement manufacturing arrangement on economically feasible terms and that we will not be able to obtain the product after termination of the existing manufacturing arrangement. We applied the statutory income tax rate of the applicable tax jurisdiction to calculate the after-tax impact of this discrete item. (2) We believe that the change from period to period due to specific acquisition-related purchase accounting and integration costs is not representative of ongoing operations and is not indicative of future performance. Specific acquisition-related discrete costs do not include amortization expense related to acquired intangible assets. We applied the statutory income tax rates of the applicable tax jurisdictions to calculate the after-tax impact of these discrete items. (3) The sum of the individual items may not equal the non-GAAP measurement due to rounding of the individual items in this presentation. IDEXX Laboratories, Inc. and Subsidiaries Non-GAAP Financial Measures Amounts in thousands except per share data (Unaudited) Six Months Ended Income from Gross Profit Operations June 30, June 30, June 30, June 30, 2008 2007 2008 2007 GAAP measurement $281,096 $222,800 $97,610 $63,344 % of revenue 53.1% 49.7% 18.4% 14.1% Write-downs of certain pharmaceutical assets (1) - 10,138 - 10,138 Acquisition-related purchase accounting and acquisition integration costs (2) - 1,892 - 2,242 Discrete income tax benefits (3) - - - - Non-GAAP comparative measurements (4) $281,096 $234,830 $97,610 $75,724 % of revenue 53.1% 52.4% 18.4% 16.9% Six Months Ended Earnings per Share Net Income Diluted June 30, June 30, June 30, June 30, 2008 2007 2008 2007 GAAP measurement $66,915 $42,691 $1.06 $0.66 % of revenue 12.6% 9.5% Write-downs of certain pharmaceutical assets (1) - 6,392 - 0.10 Acquisition-related purchase accounting and acquisition integration costs (2) - 1,432 - 0.02 Discrete income tax benefits (3) (1,472) - (0.02) - Non-GAAP comparative measurements (4) $65,443 $50,515 $1.04 $0.78 % of revenue 12.4% 11.3% Management believes adjusted diluted EPS is a useful non-GAAP financial measure to evaluate the results of ongoing operations, excluding significant specified events, period over period, and therefore believes that investors may find this information useful in addition to the GAAP results. We use these supplemental non-GAAP financial measures to evaluate the Company's comparative financial performance. The specified items that are excluded in these non-GAAP measures are actual charges that impact net income and cash flows, however, we believe that it is useful to evaluate our core business performance period over period excluding these specified items, in addition to relying upon GAAP financial measures. (1) We believe that the write-down of certain pharmaceutical assets is not indicative of future performance because significant costs of a similar nature are not likely to recur within a reasonable period. We believe that we do not have other large inventory investments where the relationship of inventory to current sales volumes creates significant exposure to valuation risk. During the second quarter of 2007, we recognized a $9.1 million write-down of raw materials inventory and a $1.0 million write-off of a prepaid royalty license associated with Navigator(R) paste, a nitazoxanide product for the treatment of equine protozoal myeloencephalitis. We have written down these assets because the third-party contract manufacturer of finished goods recently gave notification that it will discontinue manufacturing the product in 2009. Additionally, product sales have been significantly lower than projected. Due in part to an estimated production volume which is low, we believe that we will not be able to enter into a replacement manufacturing arrangement on economically feasible terms and that we will not be able to obtain the product after termination of the existing manufacturing arrangement. We applied the statutory income tax rate of the applicable tax jurisdiction to calculate the after-tax impact of this discrete item. (2) We believe that the change from period to period due to specific acquisition-related purchase accounting and integration costs is not representative of ongoing operations and is not indicative of future performance. Specific acquisition-related discrete costs do not include amortization expense related to acquired intangible assets. We applied the statutory income tax rates of the applicable tax jurisdictions to calculate the after-tax impact of these discrete items. (3) We believe that certain significant discrete income tax items create impacts on financial measures that are not indicative of future performance because the items are not likely to recur within a reasonable period. For 2008, the separately identified discrete income tax benefit was due to a reduction in international deferred tax liabilities due to lower anticipated international tax rates. (4) The sum of the individual items may not equal the non-GAAP measurement due to rounding of the individual items in this presentation. IDEXX Laboratories, Inc. and Subsidiaries Segment Information Amounts in thousands (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Revenue: CAG $230,752 $194,025 $434,361 $367,458 Water 20,150 17,105 36,966 31,510 PAS 21,489 18,683 42,651 35,494 Other 8,179 7,233 15,666 13,739 Total $280,570 $237,046 $529,644 $448,201 Gross Profit: CAG $120,800 $89,049 $222,785 $175,379 Water 12,433 10,809 22,748 20,041 PAS 14,430 11,302 28,663 22,265 Other 3,501 2,931 6,628 4,845 Unallocated 96 130 272 270 Total $151,260 $114,221 $281,096 $222,800 Income from Operations: CAG $47,807 $23,179 $77,362 $46,764 Water 8,302 7,156 14,572 12,798 PAS 5,514 3,760 11,342 7,725 Other (54) (101) (243) (514) Unallocated (2,678) (1,527) (5,423) (3,429) Total $58,891 $32,467 $97,610 $63,344 Gross Profit (as a percentage of revenue): CAG 52.4% 45.9% 51.3% 47.7% Water 61.7% 63.2% 61.5% 63.6% PAS 67.2% 60.5% 67.2% 62.7% Other 42.8% 40.5% 42.3% 35.3% Income from Operations (as a percentage of revenue): CAG 20.7% 11.9% 17.8% 12.7% Water 41.2% 41.8% 39.4% 40.6% PAS 25.7% 20.1% 26.6% 21.8% Other (0.7%) (1.4%) (1.6%) (3.7%) IDEXX Laboratories, Inc. and Subsidiaries Revenues by Product and Service Categories Amounts in thousands (Unaudited) Three Months Ended Percentage Change Net of Percentage Acqui- Percentage Change sitions Change from and from Acqui- Currency Net June 30, June 30, Dollar Percentage Currency sitions Effect Revenue 2008 2007 Change Change (1) (2) (3) CAG $230,752 $194,025 $36,727 18.9% 4.0% 0.4% 14.5% Water 20,150 17,105 3,045 17.8% 4.2% - 13.6% PAS 21,489 18,683 2,806 15.0% 11.4% - 3.6% Other 8,179 7,233 946 13.1% 5.1% - 8.0% Total $280,570 $237,046 $43,524 18.4% 4.7% 0.3% 13.4% Three Months Ended Percentage Change Net of Percentage Acqui- Percentage Change sitions Change from and from Acqui- Currency Net CAG June 30, June 30, Dollar Percentage Currency sitions Effect Revenue 2008 2007 Change Change (1) (2) (3) Instruments and consumables $80,777 $71,490 $9,287 13.0% 4.7% - 8.3% Rapid assay products 41,265 36,588 4,677 12.8% 1.9% - 10.9% Laboratory and consulting services 79,341 68,548 10,793 15.7% 5.2% 1.2% 9.3% Practice information management systems and digital radiography 14,015 11,697 2,318 19.8% 1.7% - 18.1% Pharmaceutical products 15,354 5,702 9,652 169.3% - - 169.3% Net CAG revenue $230,752 $194,025 $36,727 18.9% 4.0% 0.4% 14.5% (1) Represents the percentage change in revenue attributed to the effect of changes in currency rates from the three months ended June 30, 2008 to the three months ended June 30, 2007. (2) Represents the percentage change in revenue attributed to incremental revenues during the three months ended June 30, 2008 compared to the three months ended June 30, 2007 from businesses acquired since April 1, 2007. (3) Organic growth IDEXX Laboratories, Inc. and Subsidiaries Revenues by Product and Service Categories Amounts in thousands (Unaudited) Six Months Ended Percentage Change Net of Percentage Acqui- Percentage Change sitions Change from and from Acqui- Currency Net June 30, June 30, Dollar Percentage Currency sitions Effect Revenue 2008 2007 Change Change (1) (2) (3) CAG $434,361 $367,458 $66,903 18.2% 4.1% 1.5% 12.6% Water 36,966 31,510 5,456 17.3% 4.4% - 12.9% PAS 42,651 35,494 7,157 20.2% 11.7% 5.8% 2.7% Other 15,666 13,739 1,927 14.0% 4.9% 6.5% 2.6% Total $529,644 $448,201 $81,443 18.2% 4.8% 1.9% 11.5% Six Months Ended Percentage Change Net of Percentage Acqui- Percentage Change sitions Change from and from Acqui- Currency Net CAG June 30, June 30, Dollar Percentage Currency sitions Effect Revenue 2008 2007 Change Change (1) (2) (3) Instruments and consumables $156,387 $138,446 $17,941 13.0% 4.8% - 8.2% Rapid assay products 79,487 67,825 11,662 17.2% 2.1% - 15.1% Laboratory and consulting services 149,448 126,436 23,012 18.2% 5.2% 4.3% 8.7% Practice information management systems and digital radiography 29,040 24,222 4,818 19.9% 1.9% - 18.0% Pharmaceutical products 19,999 10,529 9,470 89.9% - - 89.9% Net CAG revenue $434,361 $367,458 $66,903 18.2% 4.1% 1.5% 12.6% (1) Represents the percentage change in revenue attributed to the effect of changes in currency rates from the six months ended June 30, 2008 to the six months ended June 30, 2007. (2) Represents the percentage change in revenue attributed to incremental revenues during the six months ended June 30, 2008 compared to the six months ended June 30, 2007 from businesses acquired since January 1, 2007. (3) Organic growth IDEXX Laboratories, Inc. and Subsidiaries Consolidated Balance Sheet Amounts in thousands (Unaudited) June 30, December 31, 2008 2007 Assets: Current Assets: Cash and cash equivalents $75,265 $60,360 Accounts receivable, net 120,565 108,384 Inventories 106,182 98,804 Other current assets 37,052 38,115 Total current assets 339,064 305,663 Property and equipment, at cost 292,515 255,176 Less: accumulated depreciation 125,911 113,324 Property and equipment, net 166,604 141,852 Other long-term assets, net 259,221 254,664 Total assets $764,889 $702,179 Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable $25,357 $32,510 Accrued expenses 103,966 107,248 Debt 158,715 72,956 Deferred revenue 11,014 10,678 Total current liabilities 299,052 223,392 Long-term debt, net of current portion 5,350 5,727 Other long-term liabilities 32,026 34,737 Total long-term liabilities 37,376 40,464 Stockholders' Equity: Common stock 9,502 9,450 Additional paid-in capital 532,950 514,773 Deferred stock units 2,546 2,201 Retained earnings 652,777 585,862 Treasury stock, at cost (800,325) (696,668) Accumulated other comprehensive income 31,011 22,705 Total stockholders' equity 428,461 438,323 Total liabilities and stockholders' equity $764,889 $702,179 IDEXX Laboratories, Inc. and Subsidiaries Key Balance Sheet Information (Unaudited) June 30, December 31, 2008 2007 Key Balance Sheet Days sales outstanding 39.9 39.4 Information: Inventory turns 2.1 2.3 IDEXX Laboratories, Inc. and Subsidiaries Consolidated Statement of Cash Flows Amounts in thousands (Unaudited) Six Months Ended June 30, June 30, 2008 2007 Operating: Cash Flows from Operating Activities: Net income $66,915 $42,691 Non-cash charges 27,354 25,401 Changes in current assets and liabilities, net of acquisitions and disposals (26,129) (5,375) Net cash provided by operating activities $68,140 $62,717 Investing: Cash Flows from Investing Activities: Decrease in investments, net - 35,000 Purchase of property and equipment (42,564) (26,235) Acquisition of businesses and intangible assets (8,514) (85,507) Acquisition of equipment leased to customers (429) (525) Net cash used by investing activities $(51,507) $(77,267) Financing: Cash Flows from Financing Activities: Borrowings on revolving credit facilities, net 85,591 77,785 Purchase of treasury stock (102,331) (92,114) Proceeds from exercise of stock options 9,174 11,986 Tax benefit from exercise of stock options 3,198 4,070 Net cash provided (used) by financing activities $(4,368) $1,727 Net effect of exchange rate changes 2,640 745 Net increase (decrease) in cash and cash equivalents 14,905 (12,078) Cash and cash equivalents, beginning of period 60,360 61,666 Cash and cash equivalents, end of period $75,265 $49,588 IDEXX Laboratories, Inc. and Subsidiaries Free Cash Flow Amounts in thousands (Unaudited) Six Months Ended June 30, June 30, 2008 2007 Free Cash Flow: Net cash provided by operating activities $68,140 $62,717 Financing cash flows attributable to tax benefits from exercise of stock options 3,198 4,070 Purchase of fixed assets (42,564) (26,235) Acquisition of equipment leased to customers (429) (525) Free cash flow $28,345 $40,027 Free cash flow indicates the cash generated from operations and tax benefits attributable to stock option exercises, reduced by investments in fixed assets. We feel free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in fixed assets that are required to operate the business. We believe this is a common financial measure useful to further evaluate the results of operations. IDEXX Laboratories, Inc. and Subsidiaries Common Stock Repurchases Amounts in thousands except per share data (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Share repurchases during the period 1,002 1,309 1,952 2,119 Average price paid per share $50.89 $44.07 $52.42 $43.47 Shares remaining under repurchase authorization as of June 30, 2008 4,900 IDEXX Laboratories, Inc. and Subsidiaries Earnings per Share Adjusted for Stock Split (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Basic As reported $0.66 $0.70 $1.11 $1.38 Adjusted for stock split $0.66 $0.35 $1.11 $0.69 Diluted As reported $0.63 $0.67 $1.06 $1.32 Adjusted for stock split $0.63 $0.34 $1.06 $0.66

Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89

Get Unlimited Organic Website Traffic to your Website
TheNFG.com now offers Organic Lead Generation & Traffic Solutions